Ethereum: A Beginners Guide

Because of the enormous growth of Bitcoin, the confidence and interest in cryptocurrencies has increased enormously. More networks appeared that implement blockchain technology.

One of the promising blockchains that has appeared is undoubtedly Ethereum. Which can not only be used as a “digital valute” but also as the first programmable blockchain.

This has made it a very attractive blockchain to invest in. This is not only due to the revolutionary use of a blockchain, but also because this crypto shows the same pattern in terms of price as Bitcoin. As a result more and more people want to take advantage of the growth and popularity of the blockchain, and they want to buy as much Ethereum as possible now that it is still available at a relatively cheap price.
But where do you start if you are interested in investing or buying Ether? Where do you store them and what is the best place to buy them?

Who is this guide for?

This manual is aimed at people who want to invest in ethereum or simply want to know more about this revolutionary blockchain.
In this manual we discuss everything you need to know to take part in this digital revolution!

WHY DID WE MAKE THIS GUIDE?

Ethereum has been around since 2015 and has since made huge leaps in popularity, functionality and value. More and more people are therefore choosing to transfer part of their income to Ethereum.

Yet there is a lot of confusion around Ethereum and Cryptocurrency in general. Many people have no idea how to use the network and where to start. While others just do not understand the difference between Ethereum and Bitcoin. Or that investing, buying and working with Ethereum requires a huge technical background.

The good news is that many of these concerns and questions have been answered and / or misplaced. You will soon find that working, paying and receiving money within the Ethereum network is not only simple, but easier and faster than at your own bank! Once the first step is taken you will soon notice how intuitive the network is.

In addition, you will also understand what makes Ethereum so popular and you will become more familiar with all the ins and outs of this cryptocurrency.

The purpose of this manual is to help you with this first step! We can well imagine that if you buy Ethereum (Ether) for the first time you will no longer see the forest through the trees. We have created this guide to guide you through your first purchase of Ether, the currency of Ethereum, and help you with the choices you can make on your way. We discuss aspects of Ethereum such as:

Ethereum wallet, what types are there and how do you choose the best?

How you can invest in Ethereum. Which brokers are reliable?

How do you ensure that you use your Ether safely?

What the differences are between Ethereum and Bitcoin.

HOW SHOULD YOU USE THIS GUIDE?

Firstly, we strongly recommend that you bookmark this page in your browser so that you can always come back if you have any questions.

This guide is subdivided into a number of chapters that each describe an aspect of Ethereum. In other words, each chapter is a mini manual in itself!

For this reason you can choose how exactly you go through the manual. If you are completely new to the world of cryptocurrencies, we strongly advise you to go through the entire manual once.

Do you already have a strong idea of ​​how and what a blockchain is and you are not completely new in this world. Then you can safely jump to the chapter that is most relevant to your question.

Important: If you are looking for the best place to buy Ethereum, you can go straight to chapter 4.

Vitalik Buterin, the inventor of Ethereum, described the blockchain as a platform for the construction of decentralized applications (DApps). The goal of Ethereum for Vitalik is to become a platform of innovation and the first programmable blockchain.

‘Open software platform based on blockchain technology’ is how Ethereum was described in Ethereum’s original whitepaper of 2009; with the aim of creating an alternative protocol for building decentralized applications. Ethereum was created as the foundation on which this idea will be built. Ethereum is also a blockchain that has been created with the help of crowdfunding!

Ethereum and Bitcoin: two totally different blockchains

When people hear about Ethereum for the first time, they usually ask the following question first; What is the difference between Ethereum and Bitcoin?

The general picture is that Ethereum and Bitcoin both do the same, but that is totally untrue. Ethereum is much more than a digital currency.

Ether

Ether (ETH) – is the fuel of the Ethereum network. Ether is used to run application platform Ethereum. Within the network, it is a form of payment between the customers of the platform to the machines that perform the operations. In other words, Ether is for Ethereum bitcoins for Bitcoin; a decentralized currency.

Like Bitcoin, Ethereum does not need a central server or additional party to carry out its transactions. All transactions are carried out by computers and are completed within 14-15 seconds . A big difference in speed if you compare this with a traditional bank debit that can cost 1 to 2 days, but even faster than Bitcoin that takes 10 minutes. This huge difference in speed comes from Ethereum’s GHOST protocol.

Ethereum is a blockchain and that means that everyone in the network has its own ‘ledger’ . In normal cases you need an agency like a bank to keep track of all transactions and to check that no money comes from nothing. With a blockchain, an intermediary as a bank is not necessary. Every user in the Ethereum network has a list of all transactions, and because of this, someone or an organization can not simply withdraw money from or into the system.

The miners of Ethereum have an important role here, their task is to check every block (all transactions of the last 14-15 seconds). This requires that they carry out a lot of computational calculations on their computer. The first to solve this will receive a fixed reward of 5 ETH. This reward is never halved; in contrast to bitcoin, where the block reward is halved every 4 years.

Ether has issued an initial stock of 60 million as a presale, and 12 million has also been held up for the development of the blockchain. Every year, 18 million Ether is added and rewarded to the minors who check the transactions. In contrast to Bitcoin, Ethereum is not “premine”, meaning that the first miners have virtually all stock of the currency. With Ether it is expected that within 5 years miners will own 50% of the entire stock. In addition, Ether has no maximum stock, but the reward for mining per year is always the same.

Smart Contracts

A revolutionary aspect of Ethereum’s network is the use of “smart contracts”. These smart contracts help you with the exchange of money, estate, shares and much more. All of this without the need for a lawyer or other intermediary. All that conflict free!

The easiest way to describe smart contracts is a comparison with a vending machine. Normally you would pay a lawyer, notary, etc. and then wait until you receive a document. But with smart contracts you simply pay at the machine, which gives you the document in your account after a certain agreed time.

An example: Imagine that you want to rent an apartment with me. You do this with a smart contract and paid in Ether. You will receive a voucher for this, which will be kept in our virtual contract. The contract states that I have to deliver a certain digital key to you for a certain agreed date.

If I do not deliver the key in time, the system will give you a return of your Ether. If I deliver the key earlier, the network will hold the key and your Ether until the agreed date; only then do you and me get our money and key respectively.

As the above example hopefully makes clear, as the supplier delivers, he is assured of his money; if the recipient is paid he is assured of his service. The document automatically turns itself off after the agreed date.

Smart contracts have applications for many sectors, for example: estate, credit, financial services, legislation and even crowdfunding!

Frequently Asked Questions

What is the difference between Ether and Ethereum?
Ether is the currency of Ethereum’s network. It is the gas that the network runs, as it were, and is comparable to bitcoin.

Are you anonymous within Ethereum?
Contrary to popular belief, you are not completely anonymous in the Ethereum network! Each wallet is publicly visible and traceable, but is not linked to one person, so it is very difficult to trace.

Where do you buy Ethereum?
Ether (ETH) can you buy from a broker like BTCDirect. No idea how it works? Then read the chapter about buying and selling Ethereum in our manual .

What is a blockchain? A blockchain is the underlying technology that Ethereum uses.

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